Central Board of Direct Taxes today issued a circular informing CBDT officials to put the MAT assessment procedures of FIIs on hold temporarily. Recovery of outstanding demand, in such cases, will be on abeyance.

On Tuesday, the government had given green signal to Justice AP Shah Committee report on MAT. As per this report, FIIs will not have to pay MAT for the period before 1 April 2015. MAT for FIIs had become a boiling issue with the Castleton case on whether MAT should apply to foreign companies including foreign portfolio investors (FPIs).

The circular also mentions that MAT section 115JB may be amended to add clarification on its inapplicability on FIIs that have no place of business in India.